First Place Financial shares plummet
By Jamison Cocklin
Shares of First Place Financial Corp. plummeted by more than 90 percent Wednesday, as investors unloaded a record 2.7 million outstanding shares to close the stock at 7 cents, only two days after the parent company of First Place Bank filed for Chapter 11 bankruptcy.
Thursday was no different with over-the-counter trading reaching a volume of more than a half- million shares with a closing price of 5 cents.
Trading had stopped Monday and Tuesday as a result of Hurricane Sandy, but markets reacted to the uncertainty surrounding the company’s early agreement with Michigan-based Talmer Bancorp, which agreed to an asset purchase agreement that could find Talmer paying $45 million for the company’s stock.
That deal will need approval in federal bankruptcy court, a process the company expects to take between 60 days and 90 days, but something equity analysts contend could take much longer.
If approved, Talmer and First Place agreed that the Michigan-based company would assume no liabilities as a result of the sale.
Officials with FPFC have repeatedly said First Place Bank customers and employees will not be affected by its move for bankruptcy protection. The bank is expected to keep its name, charter and some of its board members if the sale with Talmer goes forward.
Shareholders, however, already have felt the brunt of FPFC’s announcement.
“They’re not going to get shares in this new company at 40 bucks or anything; it doesn’t work like that,” said Tom Picino, fund manager at Diamante Capital Partners LLC, a hedge fund in Poland, which is not involved in any of the First Place proceedings. “Right now, it just appears that everybody is dumping shares and taking whatever they can get out of them.”
Shares of FPFC have been volatile in the past six months, but Wednesday and Thursday was a seesaw. The stock climbed sharply upward in a split second and bottomed out the next.
This week’s low points were some of the company’s worst. The last time it reached anywhere near the floor was in 2011, just days after the company was pulled off the Nasdaq for failing to file financial statements with regulators.
For most of this year, the stock has been unable to break anywhere above 80 cents, and on Thursday analysts were predicting a downward trend and had a negative outlook for the stock.